Accounting Obj 3

Mary is preparing a Balance Sheet. When she completes the Owner's Equity Section, what should the end result represent?

• The total assets are less than the owner's equity

• The total assets plus total liabilities owner's equity

• The total assets should equal total liabilities plus owner's equity

• The total assets should equal total liabilities minus owner's equity

Mariah Smith, Capital and Mariah Smith, Drawing are both classified as:

• owner's equity

• expenses

• liabilities

• revenue

What is an example of an account that has a normal debit balance?

• Accounts Payable/Ray's Office Equipment

• Insurance Expense

• Ray Smith, Capital

• Sales

What is an example of an account that has a normal credit balance?

• Cash

• Accounts Payable/Jones Supply

• Prepaid Insurance

• Supplies

Sales is classified as:

• assets

• expenses

• liabilites

• revenue

What is the effect on owner's equity when a business receives $2,000 cash from sales?

• Owner's equity is decreased by $2,000

• Owner's equity is increased by $2,000

• Owner's equity is decreased by $4,000

• Owner's equity is increased by $4,000

Which is an example of an account that carries a normal credit balance?

• Cash

• Joan Brown, Drawing

• Supplies

• Tyler Jackson, Capital

What is the effect on assets when the owner increases owner's equity by investing $1,000 in the business?

• Assets are decreased by $1,000

• Assets are decreased by $2,000

• Assets are increased by $1,000

• Assets are increased by $2,000

Rent, the telephone bill, and advertising costs are all classified as

• assets

• expenses

• liabilities

• revenue

Cash, office equipment, and prepaid insurance are all classified as:

• assets

• liabilites

• owner's equity

• revenue